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Amid growing BRI pressure from China, Oli eyes rapprochement with New Delhi
The Prime Minister’s party says Nepal cannot backtrack on the BRI, but signals that it should be mindful of India’s sensitivities; the CPN-UML does not believe that Nepal can progress or the interest of Nepali people could be promoted by pursuing anti-India policy, says a party official
President Ram Chandra Paudel greets newly elected Prime Minister K.P. Sharma Oli during the latter’s oath-taking ceremony at Shital Niwas, in Kathmandu.
| Photo Credit: PTI
Every time there is a government change in Kathmandu, the same old discourse, but with added vigour, starts—what kind of foreign policy Nepal shall be pursuing. And that basically pertains to relations with India and China, Nepal’s two immediate neighbours and the world’s rising economies.
The sudden change in the political equation in the Himalayan nation in the third week of July catapulted K.P. Sharma Oli, chairman of the Communist Party of Nepal (Unified Marxist-Leninist), or the CPN- UML, to power, for a third time since 2015 when Nepal adopted its new constitution that led to a souring of ties between Kathmandu and New Delhi.
According to international watchers, one issue that could put Mr. Oli in a tight spot is the Belt and Road Initiative (BRI), China’s ambitious infrastructure and connectivity scheme which Nepal signed up to in 2017.
Mr. Oli, 72, has returned to power, with the backing of the Nepali Congress (NC) on the heels of a series of pressure-building exercises by Beijing to move projects under the BRI forward in Nepal. But Mr. Oli is also in a bid to rework his ties with New Delhi, which doesn’t seem to be quite amused with China’s growing influence in what it considers its “traditional backyard.”
Internal dynamics
Binoj Basnyat, a strategic analyst and retired Major General of the Nepal Army, says the BRI may continue to be in the spotlight but may not get much momentum under Mr. Oli, given the nature of the coalition he leads.
“There could be continued pressure from the north on the Nepal government for the BRI execution, but Mr. Oli and his coalition partner, the Nepali Congress, are poles apart on the process,” said Mr. Basnyat. “The NC is against any BRI projects under loans while signalling that grants or soft loans [with minimum interest and long payback period] are acceptable.”
In June, during the visit of the Chinese Vice Minister for Foreign Affairs Sun Weidong to Kathmandu, it was expected that an implementation plan of the BRI would be signed as a precursor of a detailed agreement for selection, funding modality, and execution of projects under the scheme. However, signing the said implementation plan was moved off the agenda at the eleventh hour.
Pushpa Kamal Dahal “Prachanda”, chairman of the Communist Party of Nepal (Maoist Centre), was Prime Minister at that time, and he was freshly back from Delhi after attending the oath of Prime Minister Narendra Modi. Prachanda at that time was backed by Mr. Oli’s party.
Conjectures were rife that Mr. Prachanda decided to retreat from signing the BRI implementation plan because of Delhi’s reservations, but multiple leaders said it was for the lack of unanimity among then-coalition partners. It was during Mr. Prachanda’s second tenure as Prime Minister in 2017 that Nepal signed up to the BRI, and NC was the coalition partner then.
In July last week, Arzu Rana, an NC leader and the newly appointed Foreign Minister, told a parliamentary committee that there was a need to initiate broader discussions among the stakeholders before moving the BRI forward for implementation.
Oli, Beijing and Delhi
Though India has maintained silence on Nepal’s signing up to the BRI, Delhi’s concerns about growing Chinese influence in Nepal remain.
Mr. Oli has to maintain a tricky balance.
His move of signing a slew of deals, including on trade, transit and transport, with China in the aftermath of the 2015 border blockade had given Delhi an impression that he had tilted towards the north. To add to that, during his second stint in 2020, he got Nepal’s new map, showing the Kalapani region which India claims as its own, within the Nepali territory, adopted through constitutional amendments.
Now in his latest sting, observers say, things do not look easy for Mr. Oli as he attempts to rebuild ties with Delhi amid Beijing’s growing influence.
Rajan Bhattarai, head of the CPN-UML’s Department of International Affairs, recently said at a public function that Nepal cannot backtrack on the BRI. “Since we have already put our signatures [on the scheme], there is no possibility of pulling out of it,” he said.
In an interview with the PTI, he said that “CPN-UML does not believe that Nepal can progress or the interest of Nepali people could be promoted by pursuing anti-India policy”.
Experts say in light of Mr. Oli’s attempt to upgrade ties with Delhi and the complexities surrounding the BRI, the Chinese scheme could be in a state of limbo for the time being.
“The CPN-UML is a divided house over the BRI and Mr. Oli himself does not seem to be in favour of the loan scheme,” said Chandra Dev Bhatta, a political scientist based in Kathmandu. “Nevertheless, regardless of whether the BRI has moved ahead or not, Chinese influence has not receded in Nepal.”
Foreign policy dilemma
Nepal’s strategically important position gives it an immense opportunity to reap benefits from the two rising powers, but it often finds itself bearing the brunt of their muscle-flexing.
Mr. Basnyat says Nepal’s foreign policy is guided more by the interest of those in power than a specific blueprint and the government of the day usually pursues it on an ad-hoc basis, or in a reactive way for that matter.
“Nepali politicians do not adhere to international practices but tend to follow their political manifestos even in the case of foreign policy issues,” he said.
While “robust and balanced foreign policy” has been a common refrain of Nepali politicians, their actions often invite derision from the public and experts alike.
A case in point is the decision of the Oli Cabinet on Monday to recall some of the ambassadors and recommend new ones. This comes a month and a half after a similar decision by the erstwhile Prachanda government.
On Monday, the Oli Cabinet decided to continue with its current ambassador in Delhi, while recommending a replacement for the current ambassador in Beijing, a Prachanda appointee.
“Lack of foreign policy stability does not bode well for Nepal,” said Mr. Basnyat. “Nepali politicians seem to be too invested in their petty interest rather than national interest.”
Indra Adhikari, an expert on international affairs, says the BRI is just a small part in the overall foreign policy and that Nepal needs to exercise prudence while dealing with neighbouring countries.
According to her, even as Mr. Oli appears set to govern for the next two years, based on the deal he has reached with the NC, he still is a weak Prime Minister—politically and psychologically.
“So even if there is a continued push from the north for moving the BRI ahead, Mr. Oli is unlikely to take a gamble,” said Ms. Adhikari. “He has to save the coalition as well, after all.”
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